U.S. stock markets closed higher on Monday as the tech rally resumed after the gap of a week. Moreover, positive developments on the coronavirus treatment front and expectations of a fresh dosage of fiscal stimulus from the U.S. government strengthened investors’ confidence. All three major stock indexes ended in the green.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.1% to close at 26,680.67. Notably, 20 components of the 30-stock blue-chip index ended in the red while 10 closed in green. The Nasdaq Composite ended at 10,767.09, surging 2.5% or 263.90 points. This marked 28th closing high of the tech-heavy index so far this year. During intraday trading, the Nasdaq Composite recorded a fresh all-time high of 10,783.80.

Meanwhile, the S&P 500 gained 0.8% to end at 3,251.84. The broad-market index turned positive year to date with a marginal gain of 0.7%. The Technology Select Sector SPDR (XLK) and the Consumer Discretionary Select Sector SPDR (XLY) climbed 2.6% and 1.6%, respectively. Notably, eight out of eleven sectors of the benchmark index closed in negative territory while three in positive territory.

The fear-gauge CBOE Volatility Index (VIX) was down 4.8% to 24.46. A total of 9.96 billion shares were traded on Monday, lower than the last 20-session average of 11.31 billion. Decliners outnumbered advancers on the NYSE by a 1.09-to-1 ratio. On Nasdaq, a 1.11-to-1 ratio favored advancing issues.

Technology Sector’s Rally Resumes

The technology sector is holding its ground defying coronavirus-induced severe volatility. In 2020, when the overall market is struggling thanks to the global outbreak of COVID-19, it is the technology sector that appears the only silver line safeguarding investors’ money to a great extent.

The Technology Select Sector SPDR (XLK), one of the 11 broad sectors of the S&P 500 index, remained the best performer providing 24.7% returns in the past three months. The tech-heavy Nasdaq Composite skyrocketed 62.4% from its recent lowest level recorded on Mar 23.

On Jul 20, tech-behemoths like Amazon.com Inc. AMZN, Microsoft Corp. MSFT, Alphabet Inc. GOOGL and Apple Inc. AAPL rallied 7.9%, 4.3%, 3.1% and 2.1%, respectively.  Each of these stocks carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strog Buy) stocks here.

Positive Developments on COVID-19 Treatment Front

Medical journal The Lancet reported that a potential coronavirus vaccine developed by Oxford University in association with AstraZeneca PLC AZN revealed promising clinical trial data in a large, early-stage human trial. Moreover, British pharmaceutical company Synairgen PLC announced that the clinical trial result of its new respiratory coronavirus treatment showed reduction in the number of hospitalized Covid-19 patients needing intensive care support.

Meanwhile, Pfizer Inc. PFE and BioNTech SE BNTX reported that their jointly developed experimental COVID-19 vaccine produced a T-cell response in people participating in a Phase 1/2 clinical trial in Germany. Earlier, this drug produced a promising data in a placebo-controlled, randomized Phase 1 study being conducted in the United States.

Expectations of a Fresh Stimulus

Market participants are closely watching the outcome of the upcoming meetings between U.S. lawmakers about a fresh  round of fiscal stimulus to combat coronavirus-induced economic devastations.

The U.S. government is expected to unveil another $1 trillion of fiscal stimulus, much lower than $3.5 trillion proposed by Senate Democrats. The investors’ are expecting around $1.5 trillion of fresh stimulus. Notably, the government already injected $2 trillion of fiscal stimulus in April.

Stocks That Made Headline

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